Valve is a company that has always intrigued me. Operating in the shadows, they rarely spring to action. But they need to in the case of reporting digital sales. For the betterment of the industry.
After Bungie opened up its neatly organized, futuristic looking offices to the press near Destiny‘s anticlimactic reveal, their openness was both welcoming and comforting. I wasn’t there, nor have I gone anywhere near Seattle in my short lifetime, however for most companies it’s procedure to avoid shelling out those sort of details. Even though nothing leaked outside of the PR spun event, their forthrightness (in a sense) was appreciated.
Seeing the pictures, of course, riled my brain to think about such exposure in greater context. That rabid thinking brought my attention to Valve, a notoriously clandestine company, utterly opposing most of the games industry. It appears that Valve cyclically hibernates, operating on Steam revenue alone, to produce a game every so often. Which is a trait unshared by most firms today, pushing games annually like clockwork. By this definition, Valve is a shadow organization.
And in most ways it is. From hiding Steam sales, to rarely producing a game, to staying mum in interviews, Valve acts and lives in secrecy. Its dominant hold over digital distribution certainly gives the company the right, as its fanatical audience purchases games in droves. But there is inherent issues with this business model and not where Valve is concerned; as a private outfit, Valve isn’t required to report digital sales of games. For the press, this is problematic because sales are a direct way of knowing a franchise’s viability. And for us bloggers it’s even more tragic because breaking down that data would make for engaging content.
While the onus doesn’t lie squarely with Valve, Steam’s outrageous foothold gives the company essentially a monopoly in digital distribution–a model likely to grow exponentially as another cast of consoles arrives. If Valve began reporting sales, it would take some time but that would become the norm, leading Origin and other services to follow. Sadly, the studios themselves are responsible for giving out these numbers as their leisure, and some have graciously.
GOG.com, a competing service, in November 2011 revealed digital sales for The Witcher 2. In that article GOG’s managing director Guillaume Rambourg said Steam accounted for 200,000 units, marginally higher than GoG.com’s 40,000 and trouncing the combined total of 10,000 from Direct2Drive, Impulse and GamersGate among other services. While startling, just those numbers represent the ardent fanfare Steam has. Though GOG has shown strides of at least taking a chunk out of Valve’s fierce lead.
As another example, the makers of Defender’s Quest: Valley of the Forgotten, Lars Doucet, wrote this article for Gamasutra explaining the game’s unexpected success. From a couple of weeks ago, the piece discusses profit margins from each digital service, and Steam led with 58.6% of sales. However, GOG and another service called Kong made up a combined 17%. The pie chart below (from the article) explains in detail:
Doucet concluded the importance of direct sales, which subsequently convinced these services to stock the game. He also noted the rise of GOG as a viable alternative to Steam, especially to those who avidly support anti-DRM measures.
After writing this article for an hour, and researching for the same time period, it’s depressing I have to scour online to find this data. The press has it easy enough: the NDP Group regularly supplies outlets with monthly sales figures, all neatly laid out and easy to process. Even if, by some accounts, the numbers are untrustworthy at best. I don’t know if the press actively lobbies Valve or others to release this information, but they should start, because it would not only give readers accurate information, but also the press would show some gull.
This whole thing also brings to light the supposed slowing-down of video games, an industry that stayed profitable throughout the recession, because digital sales aren’t reflected in hard data. It’s a far-reaching consequence and surely affects stock prices and other financial notables. Essentially, the industry’s bottom line. (But that’s for another post.)
Valve is a private institution. They have the right to exercise their affairs as they see fit. But their prominence has heavy consequences.
To the readers: What do you think of Valve’s secrecy? Are you an avid PC user? If so, why do you choose Steam over other services? And, in the grander scheme of things, how do you feel the revelation of digital sales would affect the industry?
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